Tuesday, 15 January 2019

Tax Penalties Quashed: Latest Appeal Cases

They tell me that 31 January 2019 is near. Penalty time if you don't get your online tax return in by then. You can appeal against all sorts of tax penalties which should not have been imposed. The appeal success rate looks to be pretty reasonable. You will find details of successes at http://www.breakinglaw.co.uk/search/label/tax%20penalties

Here are two of the latest taxpayer wins.

In Redman v Commissioners for HMRC Appeal number TC/2017/07240 the first-tier tribunal of the tax chamber cancelled penalties of £97,821 for two tax years which had stunned an evangelical Christian who earns his living as a singer/songwriter and musician and for a period of time had been non-resident here while working in the USA. When his accountant came to file his late tax returns for two years subsequent to his return to the UK,  the accountant found he was unable to do so because Mr Redman had been removed from the self-employed system. Trouble is that HMRC had failed to notify that fact to him or his accountant. Nevertheless, HMRC asserted that Mr Redman had breached section 7 of the Taxes Management Act 1970 by deliberately not giving notice of his liability to be charged up for tax in relation to those two years. 

The Tribunal decided that the failure to notify could not have been deliberate because neither Mr Redman nor his accountant had been notified that Mr Redman had been taken out of the self-employed system. It also decided that was a reasonable excuse for non-notification. So, no deliberate default and no carelessness.

Over to Advantage Business Finance Ltd v Commissioners for HMRC [2019] UKFTT 30 (TC) where daily penalties of £900 were cancelled by the Tribunal for a late Annual Tax on Enveloped Dwellings return (pretty obscure, I know). The reason? The law required HMRC to notify the taxpayer of the date from which the penalty was payable. It did so but only after the end of the penalty period. Too late.

Happy Returns to you!